Shipbuilders Complain About S. Korean Shipbuilding Aid
European shipbuilders recently complained to the European Union over South Korean state aid to its shipbuilders, opening the way for a possible EU case against Seoul at the World Trade Organization (WTO), Reuters reported. The Committee of EU Shipbuilders' Associations (CESA) said it had filed a complaint with the European Commission under the EU's Trade Barriers Regulation over alleged trade distortions in global shipbuilding caused by South Korean aid to its industry. "We are complaining about the state aid that Korean companies are receiving," Reinhard Lueken, the head of CESA's Brussels office. He said there were a number of bankrupt shipyards in Korea still offering prices which did not cover their costs.
EU Points Finger At South Korea
The European Union has accused South Korean shipyards of distorting the international market by pricing ships below cost, but put off a decision on whether to launch a trade complaint against Seoul. In its latest report on world shipbuilding, the EU's executive Commission said significant over-capacities in South Korean shipyards, combined with a need to generate new orders to assure sufficient cash flow, prevented a recovery of shipbuilding prices. None of the South Korean shipbuilding contracts it had examined had been priced at a level that covered operating costs, profits and debt repayments, the Commission said. South Korean yards incurred losses averaging 14 percent on these orders, it said.
